Bank of America released a report on Monday warning that the US stock market, which has been thriving this year, may be approaching a 'hangover period' after the US presidential election. The surge in the US stock market seems to be disconnected from the economic data, and this disconnect will eventually need to be resolved, which may mean that the stock market will undergo a correction. This year has been a fruitful year for the US stock market, with the S&P 500 index up over 27% so far. However, according to Business Insider, Bank of America warns that the post-election euphoria in the US may cause the stock market to enter a 'hangover period', with the S&P 500 index potentially dropping as much as 7%. The Bank of America report points out that there is a growing disconnect between the US stock market and the economy. Despite mediocre economic data, the US stock market index has continued to rise after the presidential election. The Bloomberg US Economic Surprise Index, which tracks the difference between the actual performance of economic data and market expectations, is currently only slightly above zero, indicating that despite the optimistic sentiment driving the market higher, there have been almost no surprising economic data recently. Sameer Samana, Senior Global Market Strategist at Bank of America, said: 'This worries us because since the election, the stock market's optimism has continued to rise. In other words, investors seem to only be following the potential bright prospects in the future and completely ignoring the disappointing current economic data. We believe that this disconnect will eventually need to be resolved.' Sameer Samana pointed out that from a technical indicator perspective, the stock market is approaching the 'overbought zone', and investors need to be 'cautious of the hangover period'. The S&P 500 index closed at 6037 points on Thursday and is expected to reach a limit of 6,090 points in the near future. If the index shows a downward trend, it may find support around the 200-day moving average of approximately 5,515 points, which means it could pull back 7% from the current level. However, despite possible fluctuations in the short term, Bank of America remains optimistic about the stock market outlook for 2025. The bank's previous report predicted that the S&P 500 index could reach 6,500 to 6,700 points by the end of 2025, with a strong support provided by economic growth and corporate profits. Other institutions have also issued warnings. BCA Research believes that due to historical high stock prices and potential weakness in the US economy, the stock market may enter a bear market in early next year. Societe Generale also stated that based on signs of weakness in the labor market, the US economy still faces the downside risk of 'compressed profits'. Investors should be aware that if there is a correction in the US stock market, the cryptocurrency market may also face downside risks. As part of risk assets, the cryptocurrency market often has a certain correlation with the stock market. The increase in economic uncertainty may further weaken the market's risk appetite.
Lihat Asli
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Bank of America warning: Kesenjangan antara saham AS dan ekonomi riil semakin membesar, hati-hati dengan penurunan besar dalam jangka pendek
Bank of America released a report on Monday warning that the US stock market, which has been thriving this year, may be approaching a 'hangover period' after the US presidential election. The surge in the US stock market seems to be disconnected from the economic data, and this disconnect will eventually need to be resolved, which may mean that the stock market will undergo a correction. This year has been a fruitful year for the US stock market, with the S&P 500 index up over 27% so far. However, according to Business Insider, Bank of America warns that the post-election euphoria in the US may cause the stock market to enter a 'hangover period', with the S&P 500 index potentially dropping as much as 7%. The Bank of America report points out that there is a growing disconnect between the US stock market and the economy. Despite mediocre economic data, the US stock market index has continued to rise after the presidential election. The Bloomberg US Economic Surprise Index, which tracks the difference between the actual performance of economic data and market expectations, is currently only slightly above zero, indicating that despite the optimistic sentiment driving the market higher, there have been almost no surprising economic data recently. Sameer Samana, Senior Global Market Strategist at Bank of America, said: 'This worries us because since the election, the stock market's optimism has continued to rise. In other words, investors seem to only be following the potential bright prospects in the future and completely ignoring the disappointing current economic data. We believe that this disconnect will eventually need to be resolved.' Sameer Samana pointed out that from a technical indicator perspective, the stock market is approaching the 'overbought zone', and investors need to be 'cautious of the hangover period'. The S&P 500 index closed at 6037 points on Thursday and is expected to reach a limit of 6,090 points in the near future. If the index shows a downward trend, it may find support around the 200-day moving average of approximately 5,515 points, which means it could pull back 7% from the current level. However, despite possible fluctuations in the short term, Bank of America remains optimistic about the stock market outlook for 2025. The bank's previous report predicted that the S&P 500 index could reach 6,500 to 6,700 points by the end of 2025, with a strong support provided by economic growth and corporate profits. Other institutions have also issued warnings. BCA Research believes that due to historical high stock prices and potential weakness in the US economy, the stock market may enter a bear market in early next year. Societe Generale also stated that based on signs of weakness in the labor market, the US economy still faces the downside risk of 'compressed profits'. Investors should be aware that if there is a correction in the US stock market, the cryptocurrency market may also face downside risks. As part of risk assets, the cryptocurrency market often has a certain correlation with the stock market. The increase in economic uncertainty may further weaken the market's risk appetite.